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  Category: Articles » Finance » Mortgages » Article

Mortgage in India- a wise option

By Rakesh Malhotra

The Indian real estate sector is booming and its future is predicted to be bright and buoyant. The economic progress, the FDI (foreign direct investment) and the Indian middle class 'growing richer by the day' are helping to plot it higher on the growth chart. As a result the Indian real estate market is one of the fastest growing markets in the world!

The most coveted spots for investment in India are Delhi, Bangalore, Chennai, Bombay, Hyderabad, Gurgaon and Kolkata. The citizens and even the foreigners and people who don't wish to settle in the country are buying property here, and the mortgage business is expanding! At present the industry financing mortgages in India is a whopping 18 billion U.S. dollars with the local as well as the foreign banks and non banking enterprises taking control.

The current market leader is HDFC (Housing Development Finance Corporation) though there are others institutions like SBI (State Bank of India) and LIC (Life Insurance Corporation). Mortgages are usually a preferred option while buying property as the Indian market offers home loans and other mortgage facilities at reasonable rates as compared to the European and American markets.

The real estate sector including the housing finance industry is undergoing a paradigm shift. It is experiencing a revolutionary change from its traditional form and is adapting itself to suit both the domestic and global expectations and standards.

If you too are thinking of buying property on mortgage in India, you need to equip yourself with the relevant facts. There are various types of home loans like those for constructing your house, renovation, house purchase, NRI loans and land purchase.

What you need to consider most importantly is the interest rates which are of two types- the fixed and the floating rates. A loan on a floating rate is riskier as this rate will change with a change in the lending trends of the market whereas market fluctuations hardly affect fixed interest rates. Another important thing is the tenure within which you need to pay back your loan. If you are paying back through monthly installments, you tend to pay more in interest. The rate of interest and the tenure vary across different institutions and generally range from 10 to 18 percent.

You can easily take the help of a mortgage broker to give a proper shape to your plan. A mortgage broker in India will give you the much needed guidance and will help you avail of the right home loan and mortgage offer that will suit both your budget and your choice.

Though the industry is expanding, there are still some bothering issues that need to be solved. The Indian government needs to step back a little and give way to the private enterprises that not only promise high revenues but also strive to provide efficient services to their clients. Some of the laws too need to be relaxed so that they facilitate transactions rather than becoming a hindrance. These questions when answered will pay in the long run and contribute to the positive transition of the industry.

About the Author
Rakesh Malhotra, an associated editor to Indian Real Estate Discussion Forum help you to exchange ideas on various issues related to commercial and residential properties in India and its various cities like Delhi, Gurgaon, Noida, Mumbai, etc.

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